Massive Clusters of Insider Selling Registered at Costco (COST) and 2 Other Companies

Graphic Packaging Holding Company (NYSE:GPK) had two of its corporate insiders offload sizable blocks of shares this past week. According to a freshly-submitted Form 4 filing, Chairman David W. Scheible discarded 200,000 units of common stock on Wednesday at prices ranging from $12.58 to $12.74 per share, trimming his overall holding to 1.17 million shares. Director G. Andrea Botta sold 20,000 shares a day later at a weighted average sale price of $12.96, which cut his equity holding to only 3,497 shares.

Graphic Packaging is a provider of paper-based packaging solutions for a broad portfolio of products in the food and beverage industries. The company’s 2015 net sales declined by 1.9% year-over-year to $4.16 billion, mainly due to the sale of its multi-wall bag and labels businesses in 2014, foreign currency headwinds and lower pricing. Graphic Packaging’s volumes were flat year-over-year, as the impact of sustained decline in demand in key markets for certain products, such as cereal and frozen and dry foods, was offset by new products. In mid-February, analysts at Jefferies cut their price target on Graphic Packaging to $15 from $17, but reiterated their ‘Buy’ rating on the stock. Jefferies believes that the company is “one of the most attractive high quality and defensive names in the group, with the stock trading with a 9.5% FCF yield”. Shares of Graphic Packaging are nearly 2% in the green year-to-date and trade at a forward P/E multiple of 14.3. This is slightly higher than the forward P/E ratios of 11.2 for International Paper Co (NYSE:IP) and 13.4 for its fiercest competitor, WestRock Co (NYSE:WRK). A total of 41 hedge funds in our system were invested in Graphic Packaging at the end of December 2015, amassing 28.30% of the company’s outstanding common stock. Iridian Asset Management, founded by David Cohen and Harold Levy, owns 27.37 million shares of Graphic Packaging Holding Company (NYSE:GPK) as of the end of the December quarter.

RSP Permian Inc. (NYSE:RSPP) witnessed a massive cluster of insider selling last week, with more than three insiders selling shares, so let’s take a brief look at the most noteworthy activity. To start with, Chief Operating Officer Zane W. Arrott sold 50,000 shares last week through multiple trades at prices that fell between $29.05 and $29.18 per share, all of which were held via Arrott Family Holdings LP. The family limited partnership continues to own 424,300 shares, while the COO holds an additional direct ownership stake of 94,789 shares. Tamara D. Pollard, Executive Vice President of Planning and Reserves, sold a 20,000-share block on Thursday at a weighted average price of $29.26, which was held via Pollard Resource Holdings LP. This entity continues to have ownership of 415,989 shares. The EVP also holds 36,877 shares directly. Chief Accounting Officer Barry S. Turcotte jettisoned 4,000 units of common stock on Tuesday at prices between $26.95 and $27.44 per share, trimming his exposure to RSP Permian to 32,440 shares.

RSP Permian is an independent oil and natural gas company that relies on unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The company’s Board of Directors recently approved a capital budget of $200 million-to-$260 million for drilling, completion, and infrastructure for 2016. This is down from capital expenditures of $391 million incurred during 2015. The company appears to be extremely well-positioned to execute its current capital program without adversely impacting the health of its balance sheet. RSP Permian had long-term debt amounting to only $698.65 million at the end of December 2015, and cash and cash equivalents of $142.74 million. More importantly, the company also had $600 million of unused borrowings under its revolving credit facility on December 31. The shares of the oil and natural gas company have advanced by 18% since the beginning of 2016, mainly owing to the recent rally in crude oil prices. Ken Griffin’s Citadel Advisors had 2.87 million shares of RSP Permian Inc. (NYSE:RSPP) in its portfolio at the end of 2015.

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